Saudi Aramco shares soar at maximum 10% on market debut

Aramco’s indicative debut price is seen at 35.2 riyals, 10 per cent above IPO price. (AFP)
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Updated 11 December 2019

Saudi Aramco shares soar at maximum 10% on market debut

  • Company is now world’s largest publicly traded company, bigger than Apple
  • More than top five oil companies combined

RIYADH: Saudi Aramco shares opened at 35.2 riyals ($9.39) on Wednesday at the Kingdom’s stock exchange, 10 percent above their IPO price of 32 riyals, in their first day of trading following a record $26.5 billion initial public offering.
Aramco had earlier priced its IPO at 32 riyals ($8.53) per share, the high end of the target range, surpassing the $25 billion raised by Chinese retail giant Alibaba in its 2014 Wall Street debut.
Aramco’s earlier indicative debut price was seen at 35.2 riyals, 10 per cent above IPO price, raising the company’s valuation to $1.88 trillion, Refintiv data showed.
At that price, Aramco is world’s most valuable listed company. That’s more than the top five oil companies – Exxon Mobil, Total, Royal Dutch Shell, Chevron and BP – combined.
“Today Aramco will become the largest listed company in the world and (Tadawul) among the top ten global financial markets,” Sarah Al-Suhaimi, chairwoman of the Saudi Arabian stock exchange, said during a ceremony marking the oil giant’s first day of trading.
“Aramco today is the largest integrated oil and gas company in the world. Before Saudi Arabia was the only shareholder of the company, now there are 5 million shareholders including citizens, residents and investors,” said Yasir Al-Rumayyan, the managing director and chief executive of the Saudi Public Investment Fund.
“Aramco’s IPO will enhance the company’s governance and strengthen its standards.”
Amin Nasser, the president and CEO of Saudi Aramco, meanwhile thanked the new shareholders for their confidence and trust of the oil company.
The sale of 1.5 percent of the firm, or three billion shares, is the bedrock of Crown Prince Mohammed bin Salman’s ambitious strategy to overhaul the oil-reliant economy.
Riyadh’s Tadawul stock exchange earlier said it will hold an opening auction for Aramco shares for an hour from 9:30 a.m. followed by continuous trading, with price changes limited to plus or minus 10 percent.

The company said Friday it could exercise a “greenshoe” option, selling additional shares to bring the total raised up to $29.4 billion.
The market launch puts the oil behemoth’s value at $1.7 trillion, far ahead of other firms in the trillion-dollar club, including Apple and Microsoft.
Two-thirds of the shares were offered to institutional investors. Saudi government bodies accounted for 13.2 percent of the institutional tranche, investing around $2.3 billion, according to lead IPO manager Samba Capital.
The IPO is a crucial part of Prince Mohammed’s plan to wean the economy away from oil by pumping funds into megaprojects and non-energy industries such as tourism and entertainment.
Watch the video marking Aramco’s opening trading:


Shoppers seek solace online amid coronavirus lockdown

Updated 02 April 2020

Shoppers seek solace online amid coronavirus lockdown

  • Using internet for shopping is fast becoming an essential part of human life in the times of crisis

RIYADH: Under normal circumstances most people do not give much thought to online shopping. However, with the closure of malls and shops because of coronavirus curbs, online shopping has become essential. But are people going overboard?

Many people are buying unnecessary items, such as clothes, bags and shoes, online despite knowing that they will have no use for these items during the pandemic. It seems that through online shopping they are seeking some kind of mental satisfaction or emotional release during house quarantine or self-isolation.

According to Rana Taha, a coach in school planning and management, shoppers who admit to buying unnecessary items online “are trying to break their routine of being quarantined.”

Deema Al-Tammami, an event planner, said: “Online shopping has increased by 100 percent during quarantine. For me, nothing sounds as much fun as online shopping these days.

“Most of our purchases are home appliances because we love to change things around, renovate, and reorder and organize our homes, which helps to relax and release stress,” she said.

“Online prices are significantly lower than normal shopping in stores,” she said.

FASTFACT

100,000

Amazon has hired extra staff to keep up with worldwide demand and plans to take on an additional 100,000 warehouse and delivery workers through April, according to media reports.

Al-Tammami said that online shopping offers the pleasure of choosing an item with care, reading the reviews and tracking the shipment.

“There is a kind of enthusiasm in it that is totally different from normal shopping.”

Amazon has even hired extra staff to keep up with worldwide demand and plans to take on an additional 100,000 warehouse and delivery workers through April, according to media reports.

However, some who were accustomed to shopping online before the pandemic are avoiding the problem of “going overboard” with excessive
purchases.

Alanood Al-Alsheikh, a government employee, said that she did 90 percent of her shopping online.

“I usually buy everything — clothes, creams, bags and house supplies — but I always buy from websites that I trust. Pharmaceutical products are much cheaper from international online websites than local ones. And, lately, I have been doing some grocery shopping online, too.

“I don’t know how much I spend online shopping these days, but it’s less than before the quarantine. Now I’m not buying clothes and bags, only creams and beauty products,” Al-Alsheikh said.

Al-Tammami said that she sees little difference in the amount of money being spent online compared with shopping from stores.

“The money we used to spend on restaurants and outdoor activities we are now spending on grocery shopping and games to play at home,” she said.

Maha Al-Nufaiei, a senior analyst, used to shop online before the pandemic, but said that she has stopped because “sanitization of packages is not guaranteed and countries are stealing from each other’s medical supplies.”

“I only shop from local websites,” she said.

Munirah Al-Ajlan, a standardization analyst, said that online shopping has advantages, such as saving time by using filters. “But it certainly has some flaws — usually the shipping might take longer.”

Defective or poorly fitting items also can be hard to return. “I usually don’t send them back and they become useless,” Al-Ajlan said.

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